Essar Oil, India's second largest private refiner, today reported its highest ever quarterly profit of Rs 1,063 crore in April-June when strong refinery margins boost earnings by 54 per cent.
Essar Oil, India’s second largest private refiner, today reported its highest ever quarterly profit of Rs 1,063 crore in April-June when strong refinery margins boost earnings by 54 per cent.
The company posted a net profit of Rs 1,063 crore in April-June compared with Rs 691 crore in the same period of the previous fiscal, Essar Oil said in a statement here.
The company, which operates a 20 million tons a year refinery at Vadinar in Gujarat, earned USD 11.05 on turning every barrel of crude oil into fuel as opposed to USD 9.04 a barrel gross refining margin in the first quarter of the previous 2014-15 fiscal.
“The gross revenues for the quarter stood at Rs 20,572 crore, which is 25 per cent lower than the Rs 27,317 crore reported in Q1FY15. This dip in revenues was mainly because of lower crude oil prices prevailing in the global market,” the statement said.
During April-June, 2015, the Vadinar Refinery continued to operate above its rated capacity, registering a throughput of 5.17 million tonnes.
“With its increased complexity, post the expansion and optimisation projects that were completed in 2012, the refinery continues to process a high volume of heavy and ultra-heavy crudes that enable better refining margins,” it said, adding the unit continues to produce a high proportion of light and middle distillates that also have a positive impact on margins.
Essar Oil Managing Director & CEO L K Gupta said for the 12th consecutive quarter, Vadinar refinery has continued with its trend of registering steady and strong performance by operating beyond its rated capacity.
“The planned 30-day refinery maintenance shutdown between September and October this year will help us complete our diesel maximisation project, which will enable us to convert lower margin intermediates like VGO to higher margin distillates like diesel,” he said.
This, he said, will further improve refining margins. “Our retail expansion is on track and we are witnessing encouraging response and improvement in sales,” he said.
Suresh Jain, CFO, Essar Oil, said, consistent strong financial performance has improved all financial parameters and ratios in the last two years.
“We are confident of further reduction in our interest cost through the ongoing dollarisation programme,” he said.
Essar Oil said 65 per cent of its revenue in the quarter ended June 30 came from the domestic market, while the rest came from exports.
Retail sales volumes of diesel have seen a consistent rise post deregulation in October last year and has contributed to the overall rise in domestic sales.
Retail sales accounted for 9 per cent of Essar Oil’s revenues in the first quarter of 2015-16 against 2 per cent in the corresponding quarter last fiscal.
During the quarter, Essar Oil commissioned 51 new petrol pumps, raising its retail network strength to about 1,550. Another 1,600 are in various stages of implementation.
Essar Oil said its coal-bed methane (CBM) field in Raniganj in West Bengal has touched a production rate of 0.65 million standard cubic meters per day. The gas produced is being sold to industrial consumers in the catchment area.
Essar Oil is presently India’s largest CBM gas producer.